UMS Holdings

I reckon, Mr. Market re-rates UMS recently, is mainly due to further cost reduction, after the company vacant its production space in Singapore on Nov 2015. The relocation to Penang started in 2011, and mostly done in 2015. The full benefit of the relocation should be in the coming FY 2016.

This relocation wasn't a small task, which took close to 5 year to complete. The company had done it without major hiccup. The relocation has given the company the cost advantage over others, and without labor shortage issue in Singapore.

(vested, and contribute a point which not mentioned in any post)

(15-04-2016, 11:40 AM)CityFarmer Wrote: I reckon, Mr. Market re-rates UMS recently, is mainly due to further cost reduction, after the company vacant its production space in Singapore on Nov 2015. The relocation to Penang started in 2011, and mostly done in 2015. The full benefit of the relocation should be in the coming FY 2016.

This relocation wasn't a small task, which took close to 5 year to complete. The company had done it without major hiccup. The relocation has given the company the cost advantage over others, and without labor shortage issue in Singapore.

(vested, and contribute a point which not mentioned in any post)

CF good point i was just waiting for someone to mention this. The factory relocation would be the biggest factor in cost reduction.

I think this event is a good time to invest in a company when it is happening, just like New Toyo which has also recently relocated their printing factory to Vietnam. Usually after relocation there will be a spike in profits due to lower costs and increase effeciency and production at new factory.

UMS increase recently is probably due to market sentiment being slightly more optimistic again with oil price increase. UMS historically has been following the index with higher beta. I remember when STI hit 2600+ last dip, UMS went as low as ~45cents. I expect UMS to jump as the index goes up and drop as index goes down. After all, it already had ample coverage few years back until the selling by boss and AMAT, and dividend investors will be holding whilst speculators will jump in whenever there is good market sentiment.


vested some at 50c last year and sold half after it hit 56c recently, will see how high this time they wanna pump it. Unlike Riverstone. UMS is not really a growth type of stock so I dun see many investor will push it up and sustain at high multiples.

Enjoy the dividends guys, just sold out this morning 63c, out for now until UMS hit 50cent again. 

-nv-

SAN JOSE, Calif. — April 21, 2016 — North America-based manufacturers of semiconductor equipment posted $1.38 billion in orders worldwide in March 2016 (three-month average basis) and a book-to-bill ratio of 1.15, according to the March Equipment Market Data Subscription (EMDS) Book-to-Bill Report published today by SEMI.  A book-to-bill of 1.15 means that $115 worth of orders were received for every $100 of product billed for the month.

SEMI reports that the three-month average of worldwide bookings in March 2016 was $1.38 billion. The bookings figure is 9.4 percent higher than the final February 2016 level of $1.26 billion, and is 0.9 percent lower than the March 2015 order level of $1.39 billion.

The three-month average of worldwide billings in March 2016 was $1.20 billion. The billings figure is 0.5 percent lower than the final February 2016 level of $1.20 billion, and is 5.3 percent lower than the March 2015 billings level of $1.27 billion.

"Order activity remains steady and is on par with both the previous quarter and one year ago,” said Denny McGuirk, president and CEO of SEMI. “3D NAND and advanced logic are the key drivers for investments.”...........................................................

http://www.semi.org/en/en/node/79876
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TSMC orders equipment for NT$2.29 billion
Jessie Shen, DIGITIMES, Taipei [Friday 22 April 2016]

Taiwan Semiconductor Manufacturing Company (TSMC) has purchased a batch of machinery equipment and intangible assets from Hermes Microvision (HMI), Fortrend Engineering, Kilopass Technology and Applied Materials for NT$2.29 billion (US$71 million).

TSMC said in filings on April 19 and 20 it spent a total of NT$7.46 billion on fab tools and facilities from Applied Materials, Ebara, Lam Research International and Screen Semiconductor Solutions. In a filing on April 15, TSMC disclosed the purchase of NT$6.37 billion worth of equipment from Applied Materials, Chen Yuan International, Lam Research and Tokyo Electron.

Thus far in 2016, TSMC has disclosed 46 separate purchases of fab equipment, cleanroom facilities and factory building construction totaling about NT$106.66 billion.

At its investors meeting on April 14, TSMC disclosed it continues to ramp up production of 16nm chips with further improvements in yield rates. The node is set to account for over 20% of TSMC's total wafer sales in 2016. TSMC expects to move 10nm technology to risk production later in 2016 followed by volume production in the second quarter of 2017. TSMC also indicated it is "well on track" with its 7nm development and expects to move the node to volume production in the first half of 2018.

In addition, TSMC is looking to establish a 12-inch wafer fab and a design service center in Nanjing, China. Planned capacity is 20,000 12-inch wafers per month, and the fab is scheduled to commence production of 16nm process technology in the second half of 2018, according to the Taiwan-based foundry.

http://www.digitimes.com/news/a20160422PM200.html
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so this is what push up the share price past week in addition to positive market sentiment, but largely expected as AMAT did mention in their podcast for earnings call that TSMC was ramping up production facilities and ordering a lot of stuff from AMAT.

(24-04-2016, 09:49 PM)BlueKelah Wrote: so this is what push up the share price past week in addition to positive market sentiment, but largely expected as AMAT did mention in their podcast for earnings call that TSMC was ramping up production facilities and ordering a lot of stuff from AMAT.

Nobody know for sure the reason for UMS recent positive run-up, but there was a review done by DBS Vickers analyst. 
Target price S$0.73 based on DCF. Hope this helps

http://sgshareinvestor.blogspot.sg/2016/...04-15.html

- vested

10nm Versus 7nm
The economics and benefits of moving to the next process node are not so obvious anymore.
APRIL 25TH, 2016 - BY: MARK LAPEDUS
http://semiengineering.com/10nm-versus-7nm/
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The Big Race
Automotive market realities and uncertainties, and what it all means to semiconductor design and manufacturing.
APRIL 21ST, 2016 - BY: ED SPERLING
http://semiengineering.com/the-big-race/
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14 IC Product Categories to Exceed Total IC Market Growth in 2016
Cellphone App MPUs and Signal Conversion top the list; Tablet MPU growth stalls, DRAM tumbles. 
19TH April 2016, by IC Insights
http://www.icinsights.com/data/articles/...ts/875.pdf
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Number of 300mm IC Wafer Fabs Expected to Reach 100 in 2016
High volume 450mm IC wafer fabs not expected until after 2020. 
14 April 2016, by IC Insights
http://www.icinsights.com/data/articles/...ts/871.pdf
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Attended the AGM and found it one of the best. Shareholders asked good questions and the board answered candidly and promptly. Many of these are related to some discussions in this forum.

1 CEO will maintain his shares at 20.1%, i.e. stop selling
He committed to be the major shareholder and will not sell more. In the past, he sold because he need funding for his other investments. There were more risky so he played with his own money first. One of them, Kraft, may be absorbed back to UMS, when it becomes profitable and if the board agree and shareholder approved

2 Real value much higher
All properties are booked at cost, even when the real value have moved up. For example, they were approached to sell the Penang property at 4 time the price they bought

3 Working on increasing top line
ASF acquisition was carefully planned so that the exposure to AFS ramp up risk is smaller with 10% share now, but having room to participate in larger part of the profit when ASF make it in the future, with the loan to share conversion. 
Malaysia government visited the factory and was impressed. Andy has also been approached by to jointly develop the country precision engineering industry with very favourable offerings. He said this may take up to 10 years to happen, but will be very significant

Looks like the dbs Vickers review effect has worn off, either that or UMS is now just tracking the index down.

DCF thanks for attending the agm and letting us know.

Did anyone ask about next year's renewal of contract with AMAT? hmm when is it due anyway exactly?

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